Delayed Medicaid Payments for D.C., Thanks to the Shutdown

Due to the unique financial structure of the District of Columbia, the city can't even spend its own money to pay for Medicaid.

Days after finding a short-term fix to keep the city running amid a federal government shutdown, Washington D.C. officials have announced that Medicaid providers won’t get paid until Congress approves a new spending measure.

The District’s Department of Health Care Finance said Thursday that it can’t pay doctors and hospitals participating in the federal Medicaid or local Alliance programs without jeopardizing a shutdown of all other services. But budget analysts and District officials said paying Medicaid doctors during the federal shutdown is a uniquely D.C. problem because of the city’s jurisdiction.

State money in the joint program is unaffected by a Congressional shutdown, and federal matching funds are allotted a quarter in advance, said Marcia Howard, executive director of Federal Funds Information for States.

“There’s three months of (federal) Medicaid funding already provided in last year’s appropriation bill,” she said. “So there’s federal money available, but D.C. might not be in a position to use their own money.”

The District’s funding is controlled by Congress, so the city has effectively been unable to use its local revenue since the federal government closed its doors Tuesday morning amid health care wrangling. That’s prompted the District to open up a $144 million reserve fund good for about two weeks of expenses. It’s still awaiting word from the White House about a request from Mayor Vincent Gray to return the District’s 32,000 employees to work by declaring them essential to the health, safety and welfare of the city.

The District suspended $89.2 million in Medicaid and Alliance payments due Friday because the reimbursements would’ve broken the city, said Wayne Turnage, director of the Department of Health Care Finance.

“Federal Medicaid dollars are available to every state, including the District, but we can’t spend our own without exhausting our reserve fund and shutting the whole city down,” he said.

About 220,000 people are enrolled in D.C.’s Medicaid and Alliance program. Alliance offers medical care for low-income D.C. residents who don’t qualify for Medicaid or Medicare.

Turnage said providers will be reimbursed once the shutdown ends, and he encouraged them to continue submitting claims. Private physicians are under no obligation to continue seeing Medicaid patients without pay, but hospitals have to treat them under federal law. Turnage said he hasn’t heard from any doctors that they’ll stop serving Medicaid patients.

“We have told them as soon as the shutdown ends we will pay them all at once,” he said.